Ottawa, Canada – The Bank of Canada (BoC) on Tuesday announced a 25 basis point cut to its overnight rate, bringing it down to 3.00%. This latest move marks the sixth consecutive rate cut since June of last year, as the central bank seeks to stimulate the economy amid growing concerns over global trade tensions.
The decision to lower interest rates was widely anticipated by market analysts, who cited slowing inflation and economic growth as key factors. The BoC also pointed to the ongoing trade dispute between the United States and Canada as a significant risk to the domestic economy.
In its monetary policy report, the BoC revised down its growth forecast for the Canadian economy to 1.8% from 2.1%. The central bank warned that a protracted trade war could have a severe impact on economic activity, potentially reducing GDP by 2.5% in the first year and 1.5% in the second.
“Prolonged and widespread trade conflicts could significantly impair Canada’s economic activity,” said Bank of Canada Governor Stephen S. Poloz.
The BoC’s decision comes as the Trump administration has threatened to impose tariffs on a wide range of Canadian goods, including steel and aluminum. Canadian officials have warned that such tariffs could lead to a trade war that would harm both economies.
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